WOLVES, CHIMPS AND DEMSETZ

Harold Demsetz has argued that when an externality can be internalized through the existence of property rights such that societal benefits exceed costs, property rights will emerge. This paper shows that property rights exist in some animal systems with respect to specific pieces of property and for reasons similar to those postulated by Demsetz. Two cases are considered: wolves, where the property right is in land; and chimpanzees, where the property right exists for meat. The external costs or benefits that produce the property rights are examined and comparisons are drawn with situations in which no externalities exist and no property rights emerge.